The Politics of the Gilded Age

Themes of Gilded Age ( ) n Politics: hard v. soft $, tariff, corruption, patronage & trusts n Industrialism: railroads, steel, oil, electricity, banking n Transformation: agrarian to urban n Urbanization: “new” immigrants n Unions & reform n Populism: farmers losing ground n “Last West”: farming, mining, cattle n By 1900, society gets more stratified

"What is the chief end of man?-- to get rich. In what way?-- dishonestly if we can; honestly if we must." -- Mark Twain 1871

The Election of 1868 n Republicans - nominate Ulysses S. Grant –promises continued Military Reconstruction –Campaigned by waving the "Bloody Shirt" - vote how you shot

Waving the bloody shirt

Ulysses S. Grant

n Democrats - nominate Horatio Seymour –"Ohio Idea“ »Policy of Repudiation - redemption of Bonds at highest possible level –Seymour backs Eastern banker’s gold plan instead

n 500,000 Freedmen vote for Grant n Grant wins by 300,000 votes

Grant Administration n Called the "Era of Good Stealings" n Democrats locked out of political trough n Business & political "machines" gain spoils n Period of graft, corruption, & scandal

The Scandals

Black Friday – September 24, 1869 n "Jubilee Jim" Fisk (the Brass) & Jay Gould (the Brains) –Corner the gold market after promise from Grant to keep Treasury from selling gold reserves

n Panic buying drives up prices n Treasury releases reserves n Prices plummet n Many are bankrupt n Grant exonerated of any wrong-doing

Tweed Ring Scandals n "Boss" William Marcy Tweed of Tammany Hall in NYC

n Used bribery, graft, & fraudulent elections to extort profits from political position

n NY Times published reports of scandals n Cartoonist Thomas Nast attacked Tweed Boss Tweed

n Samuel J. Tilden prosecuted Tweed on corruption charges n Boss Tweed dies in jail

The Tammany Tiger Loose - What are you going to do about it?

Credit Mobilier Scandal n Union Pacific RR insiders formed construction company n Made exorbitant profits by hiring & overcharging themselves (348% dividends in 1 year!)

n Used bribery & kickbacks to Congress n 1872 Congressional investigation led to censuring of 2 members & the VP

Whiskey Ring Scandal n Whiskey producers cheated gov't out of millions of dollars in excise taxes n Paid kickbacks to controllers & tax collectors

n Grant: “Let no guilty man escape.” n Grant’s personal secretary is involved n Persuaded jury not to convict

Military Ring Scandal n Secretary of War Belknap involved selling the privilege of disbursing shoddy goods to Indians –Made $24,000 profit

n Grant accepts Belknap’s resignation "with regret“ the same day that the House impeached him n Scandals lead to calls for civil service reforms

Election of 1872 n Liberal Republican "Revolt" n Republican party splits over "Anti-Grantism“ n Liberal Republican Party Formed –“Turn the Rascals Out!”

–Led to nomination of Horace Greeley, liberal editor of NY Tribune –Democrats endorsed Greeley as well n Republican Party re- nominated Grant n Grant wins electoral votes after much mudslinging

n Election leads to minor civil service reforms & a general amnesty for most southerners n Grant’s 2 nd term marred by economic crisis

Panic of 1873 n Causes: –Overproduction of railroads, mines, factories, & farm products –Risky loans unpaid –Depreciation of Greenbacks

n Collapse leads to 15,000 businesses failing n Currency controversy heats up into major issue

Currency Controversy n “Contraction” –Process of removing paper "Greenbacks" from circulation leads to controversy

n Hard Money –Creditors –Less currency –Deflation –Gold currency –Bankers n Soft Money –Debtors –More currency –Inflation –Silver currency –Farmers

n 1870: Supreme Court ruled the Civil War Tender Act unconstitutional –Set stage to continue withdrawing inflated Civil War paper money n Grant adds two seats to Supreme Court (to 9 Justices) who vote to repeal earlier decision & keep Greenbacks in circulation

n 1874: Grant persuaded by Hard Money people to veto a bill to expand the money supply n 1875: Specie Resumption Act –Pledges government to withdraw more Greenbacks & to buy all Greenbacks back for gold by "Redemption Day" in 1879

Silver Issue n Controversy over gold coins vs. silver coins n Early 1870's: Treasury sets rate of exchange for silver at 1/16 the price of gold n This is below "market" value n Miners slow down extraction & sale of silver

"Crime of ‘73" n Treasury stops coinage of silver dollars n New silver deposits found & price of silver drops n Call for new silver minting & return to “Dollar of Our Daddies"

Grant’s Monetary Policy: n Contraction & a “Hard- money” policy n Decreases the money supply n Brings inflation under control

n Increases the government’s credit rating level n Worsens the depression begun with the Panic of 1873 n Brings Greenbacks back to face value

Results: n Democratic House is elected in 1874 n Greenback Labor Party formed in 1878 –14 members of Congress

n Bland-Allison Act (1878) –Instructed Treasury to buy & mint $2-4 million a month of silver as compromise n End of depression = end of controversy

Politics in the Gilded Age

Paradox of Politics n Era of “Forgettable Presidents” n Congress & business more influential n Major parties agreed on most major issues, yet highly competitive political era

Two-Party Stalemate

n 80% voter turnout & straight party ticket voting n Patronage & bribery dominated politics n 2 major parties:

Republicans n Protestant / Puritanism n Personal Morality n Business support n Northeast / Midwest n Freedmen / GAR

Democrats n Catholic / Lutheran n Tolerance of differences n Resisted gov't control of morals n Old South n Industrial cities / Labor

Intense Voter Loyalty

Republican Party Factions

Stalwarts n "Lord Roscoe" Conkling n Senator from New York n Embraced spoils system –Jobs for votes

Half-Breeds n James G. Blaine n Congressman from Maine n Lip-service to reform

Mugwumps n Thomas Nast –Cartoonist who embodiedideals n Young liberal reformers n Anti-corruption n Help freedmen

Conflicts within Republican Party led to deadlock

Election of 1876 n Grant considers 3 rd Term –“Reminded" by Congressional Resolution of the tradition of 2 terms

Puck Wants a Strong Man at the Head of Government-- But Not This Kind

The Political ‘Army of Salvation’

n Republican Stalwarts & Half-breeds reach compromise, nominate Rutherford B. Hayes –"The Great Unknown“ –Former Governor of Ohio

n Democrats nominate Samuel J. Tilden –"Whispering Sammy“ –NY attorney who bagged Tweed –Campaigns against Republican Scandals & for Civil Service Reform

Hayes vs. Tilden

n Tilden wins 184 out of 185 needed electoral votes n 20 electoral votes in contest, four southern states send dual sets of elector votes

1876 Presidential Election

n Constitution states that the President of the Senate should open the votes in the presence of the House and Senate - no mention of who counts

The Political Crisis of 1877 “Corrupt Bargain” Part II?

n President of the Senate (Vice President) = Republican n Speaker of the House = Democrat

A Political Crisis: The “Compromise” of 1877

Compromise of 1877 n Passage of Electoral Act of 1877 –Set up electoral commission 15 men - 5 each from House, Senate, & Supreme Court –Republicans outnumber Democrats 8-7

n The Compromise: –Republican Hayes is President –South to lose the last remaining Federal Troops »Reconstruction ends at expense of southern blacks –Southern RR route

Hayes Prevails

Alas, the Woes of Childhood… Sammy Tilden—Boo-Hoo! Ruthy Hayes’s got my Presidency, and he won’t give it to me!

Hayes Presidency ( ) n “His Fraudulency” & “Lemonade Lucy” n Economic & Labor problems –Railroad strikes put down

6 n Immigrant problems –Anti-Chinese Kearneyites in California –Hayes vetoed Anti- Chinese immigration law –Bill passes in 1882 during Arthur Administration

Election of 1880 n Republicans –Standoff between Stalwarts & Half-Breeds leads to "Dark Horse" candidate n James A. Garfield gets nomination –Chester A. Arthur (Stalwart) as VP

n Democrats nominate Winfield S. Hancock –Civil War General wounded at Gettysburg n Campaign about character not issues n Garfield wins 214 to 155 in electoral vote –By 39,000 votes

Election of 1880

n Stalwarts & Half-Breeds fight over spoils n Half-Breed Blaine becomes Secretary of State & sought to shut out the Stalwarts

n June 1881: Stalwart office seeker Charles Guiteau assassinates President Garfield who dies that September

Garfield Assassinated “I am a Stalwart. Arthur is now President of the US”

n Chester A. Arthur becomes President n Nation shocked by "an office - or your life!"

President Chester A. Arthur

Arthur Presidency ( ) n President Arthur takes up cause of civil service reform n Conklingites seek offices & favors - get cold shoulder from Arthur

n Pendleton Act of 1883 –Prohibited financial assessments on office holders –Established merit system based on aptitude –Set up Civil Service Commission & created classified positions

n Problem: –Politicians turn to Big Business to make up for campaign funds

Election of 1884 n Republicans nominate James G. Blaine –Half-Breed –Tainted by scandal »"Mulligan Letters" proving his corruption ("Burn this letter.“)

n Scandal caused some Republicans to jump ship –Called Mugwumps = "holier than thou“ n Democrats nominate Grover Cleveland –"Grover the Good“ –Said to be clean –Republicans discovered he had fathered an illegitimate son

n Election is all about character, not about issues –D= "Burn, burn, burn this letter" –R= "Ma, Ma, where’s my Pa?” –R= "Rum, Romanism, Rebellion"

Ma, Ma…where’s my pa? He’s going to the White House, ha… ha… ha…! A Dirty Campaign

Blaine vs. Cleveland

n Cleveland wins –First Democrat in White House since Buchanan

Cleveland Presidency ( ) n Cleveland is unbending supporter of laissez- faire –Gov't out of free market n Weak reformer

n Fired Republicans & hired Democrats - 2/3 of Federal employees n Fought against pensions for dubious veterans n Fought to reduce tariffs & reduce gov't surplus n Sought to reduce monopolies

Bravo, Señor Clevelando!

Election of 1888 n Democrats renominate Cleveland despite his insistence of making Tariff an issue n Republicans nominate Benjamin Harrison –Grandson of "Tippacanoe" William Henry Harrison

n British Minister Sir Lionel Sackville-West writes that a vote for Cleveland is a vote for England & free trade n Republicans put fear of low tariffs on Big Business - raise major war chest n Cleveland won popular vote but lost election

President Benjamin Harrison

n March 1889: Harrison, the “White House Ice Chest,” assumes the presidency n Republicans eagerly snapped up Federal offices & prepared to pass legislation to maintain the high protective tariffs

n Makes “Half-breed” James G. Blaine (the Plumed Knight) Secretary of State again n Young New Yorker Theodore Roosevelt placed on the Civil Service Commission

“Billion Dollar” Congress n Republicans have only 3 more votes than the 163 needed for a quorum n Democrats were able to block a quorum by failing to answer roll call

Tsar Reed n New Republican Speaker of the House Thomas B. Reed changed the House rules & counted heads to establish a quorum n 1 st “Billion Dollar” Congress then began to pass legislation –1 st to pass over a billion dollars in peacetime

“Billion Dollar” Legislation

Pension Act of 1890 n Substantially increases the number eligible for Civil War pensions n Continued the need for tariffs by reducing the federal surplus

Sherman Anti-Trust Act (1890) n Forbade combinations in restraint of trade n Loopholes used by corporations since could not be enforced n More new trusts created in first year n Used by courts to curb labor organizations

Sherman Silver Purchase Act (1890) n Eastern "gold bugs" agreed to double the amount of silver purchased in exchange for western support of increased tariffs n Silver certificates could be redeemed for silver or gold

McKinley Tariff Bill (1890) n Raised tariff rates to highest peacetime level ever –Averaged 48.4% on dutiable goods n Raised tariffs on agriculture goods that did not need protection n Farmers were hurt by higher prices for goods

Congressional Election of 1890 n Discontent with “Bill” McKinley & his tariff leads to the election of a Democratic Congress in 1890 n 9 members of the militant Farmers Alliance were elected to Congress

Election of 1892 n Democrats run ex- president Grover Cleveland against Republican incumbent Harrison & Populist James B. Weaver James B. Weaver

n Republicans call for continued high tariffs which are again the major issue

The People’s Party n Populists rooted in the Granges, Farmers Alliances, & Labor movement

Price Indexes for Consumer & Farm Products:

n Campaigned on a platform of "free silver," graduated income tax, gov’t ownership of telephone, telegraph, & railroads

n Also called for direct election of Senators, a single 4-year term of office for the President, & use of the referendum & initiative n Also backed labor’s demands for shorter hours & immigration restrictions

Homestead Strike n Summer of 1892: wave of labor strikes swept the country n At Carnegie’s Homestead Steel plant, 300 armed Pinkerton detectives used to try & crush a strike

Homestead Strike

n Steelworkers fought back & federal troops were eventually used to end the strike n Homestead Strike showed seriousness of labor unrest & disproved that tariff protection led to higher wages n Lost Republican votes

Jim Crow South n Populists, led by Tom Watson of Georgia, appealed to southern Blacks to abandon the Republicans & vote for the Populists n Southern “Bourbon” leaders played on racial fears to woo poor whites back to the Democratic Party

n Fear of Black political power led to the final passage of Jim Crow voting restrictions n Southern Populists soon became increasingly racist in their rhetoric n Populists one of the few third parties to win electoral votes –Weaver got over 1 million popular & 22 electoral votes in 1892

Election of 1892

Cleveland Wins Again

n Grover Cleveland took office in 1893 as the only president to ever be reelected after being defeated n Cleveland comes back more conservative & a little heavier

The Panic of 1893 n Depression begins in 1893 that will last for about 4 years n It is the first major depression of the modern industrial age

n Caused by overbuilding, over speculation, labor disorders, & agricultural depression n Silver issue led to poor credit for US n Banks failed, businesses failed, thousands out of work

n Charities set up soup kitchens for the thousands of hoboes living in the streets

n Federal government followed laissez-faire policy & did nothing

Gold Panic n Gold reserves fall below the $100 million n “Endless chain” had gov’t paying more for silver purchases than it received in gold

n Cleveland calls a special session of Congress seeking to repeal the Silver Purchase Act n In the middle of the crisis, Cleveland has to secretly have a tumor removed from his mouth

Congressional Opposition n William Jennings Bryan –Nebraska Democrat who led opposition –Great oratory made him famous throughout country n Cleveland able to use the power of his office to get the law repealed, but alienated the silverites in the Democratic Party

n 1894: gold reserves dropped to $41 million dollars & the country is in danger of going off the gold standard n Cleveland is forced to sell bonds to raise gold reserves

n The “endless chain” redemption continued to cause the treasury reserves to drop n Depression deepened

Wilson Gorman Tariff Act (1894) n Democrats passed a new tariff that created a modest reduction in tariffs & a 2% income tax on incomes over $4,000

n Bill ultimately watered down by amendment & passed without the signature of an outraged Cleveland n Supreme Court will declare the income tax unconstitutional in 1895 –16 th Amendment will allow for an income tax in 1913

1894 Congressional Election n Republicans win the congressional election of 1894 in a landslide & begin to boast that they will win the White House in ‘96

Morgan Steps In n 1895: deepening gold crisis led Cleveland to seek loans from Wall Street bankers n J.P. Morgan loans $65 million to federal gov’t & confidence is restored –Banks will earn $7 million in interest

n Populists are enraged by the defeat of income tax & Cleveland’s sellout to “Jupiter” Morgan n Coin’s Financial School becomes the bible of free- silverites n Silver becomes the issue of the Populists in 1896